After spending months studying the investment climate of over 20 cities and provinces and more than 30 industrial zones in Vietnam, innovative solar module manufacturer JinkoSolar has decided to pour $500 million into a venture in the north-eastern province of Quang Ninh’s Song Khoai Industrial Zone. The factory, licensed in late March, is expected to become operational this year. Nguyen Duc Tiep, deputy head of Quang Ninh Investment Promotion Agency, told VIR that JinkoSolar is speeding ahead with the project. “Besides JinkoSolar, it is expected that Quang Ninh will see more foreign direct investment (FDI) in the time to come,” Tiep said.
Over the next few weeks, the province will hold an online investment promotion conference to attract more Japanese funding. The event is expected to be joined by 40-50 Japanese companies, mostly operating in manufacturing and processing.
Currently, the province is instructing 10 foreign investors to complete dossiers, which are expected to be licensed this year with the total registered capital of $576 million, including some big projects involving liquefied natural gas warehousing ($200 million), refrigerator equipment ($90 million), and environmental protection ($160 million).
According to the Ministry of Planning and Investment (MPI), Quang Ninh is a typical example among many localities as good destinations for FDI in Vietnam, where the business and investment climate is significantly improving.
Despite causing grave consequences worldwide, COVID-19 has as yet been unable to prevent FDI inflows to Vietnam for the long term, and rising manufacturing, with both being major drivers of Vietnam’s economic growth this year and beyond.
For 2021 up to May 20, the total of newly-registered, added capital, and capital contributions as well as share purchases hit $14 billion, up 0.8 per cent on-year. Notably, the newly-registered capital hit $8.83 billion, up 18.6 per cent on-year, and the added capital reached $3.86 billion, up 11.7 per cent on-year.
FDI disbursement hit $7.15 billion, up 6.7 per cent on-year, thanks to production and business recovery.
The MPI said many major foreign-invested enterprises (FIEs) are expanding in Vietnam, which is again restricting COVID-19 to only a handful of already locked-down areas.
For example, CEVA Logistics (Vietnam) under global logistics and supply chain company CEVA Logistics is now boosting recruitment of more employees for many positions. Under the business plan of CEVA Logistics Vietnam, the firm is expanding its network to ship goods to the US, which was Vietnam’s largest export market, with total turnover of $ 37.6 billion in the first five months of 2021, up 49.8 per cent on-year.
“In Vietnam, the company’s total revenue in the first quarter from freight shipping increased about 30 per cent on-year,” Nguyen Thanh Van, head of Contract Logistics at CEVA Vietnam, told VIR. “It is expected that the rate will be about 20-35 per cent for the entire year.”
According to the General Statistics Office, businesses such as CEVA have contributed greatly to the country’s goods transportation which hit 739 million tonnes in the first five months of 2021, up 10.5 per cent as compared to the same period last year, when the rate declined 8 per cent on-year. Also in the first five months, Vietnam’s total export-import turnover is estimated to hit $262.2 billion, including $130.94 billion from exports – up 30.7 per cent on-year, and $131.3 billion from imports - up 36.4 per cent on-year.
A World Business Outlook Survey conducted released two weeks ago by the German Chambers of Commerce Abroad said that German businesses are showing optimism about Vietnam’s economy.
“Vietnam is still one of the countries with the fastest economic growth in Southeast Asia,” said the report. “German business leaders in Vietnam maintain a positive view with the economic expectation as well as with their situation in Vietnam and they look forward to a recovered year of 2021 and 2022.”
According to the General Statistics Office (GSO), in the first five months of this year, the economy’s index for industrial production (IIP) climbed 9.9 per cent as compared to that of only 1 per cent in the same period last year. Notably the manufacturing and processing sector, which creates 80 per cent of the nation’s industrial growth, ascended 12.6 per cent in comparision with that of merely 2.2 per cent in the corresponding period of 2020.
The IIP in May expanded 11.6 per cent over the same period last year, when the IIP declined 3.1 per cent on-year.
The GSO also reported that, in the first five months of 2021, the economy witnessed 55,800 enterprises newly established, registered at VND778.3 trillion ($33.84 billion) and employing 412,400 new labourers, up 15.4 per cent in the number of enterprises and 39.5 per cent in registered capital.
If another VND975.1 trillion ($42.4 billion) registered by 19,100 operational enteprises was included, the total capital supplemented into the economy in the period was VND1.753 quadrillion ($76.2 billion), up 27.5 per cent on-year. Moreover, 22,600 businesses resumed their operations, up 3.9 per cent on-year. Source: General Statistics Office